| Wed 10 Sep 2003, 12:41 | | Sasfin Reports Increase In Core Earnings In A Diff |
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Sasfin Reports Increase In Core Earnings In A Difficult Year
SASFIN HOLDINGS LIMITED
Share code : SFN
ISIN : ZAE000006565
Banking and financial services group Sasfin has reported a substantial increase
in core profits to R29,3 million for the year ended 30 June 2003 (2002: zero).
This figure excludes currency gains and losses , as well as the impact of
Accounting Statement AC 133.
Attributable income fell to R20,4 million from R34,4 million in the previous
financial year, while headline earnings per share fell to 83 cents from 147,7
cents.
The Group has largely immunised itself from future currency volatility by
converting into Rand its offshore receivables and deposits, which were held in
foreign currencies for most of the year under review. These foreign currency
holdings resulted in substantial translation gains in the previous financial
year when the rand experienced severe depreciation, but recent rand strength has
had the opposite effect on the latest results.
The conversion of these receivables and deposits into Rand puts an end to
Sasfin"s currency risk and improves its interest income by allowing it to
benefit from high-yielding rand-based assets rather than low-yielding foreign
currencies. The full benefits of this conversion will be evident in the next
financial year.
Chief executive Roland Sassoon says the results are satisfying given a sluggish
economy and a difficult time for small- to medium-sized banks, most of which
have exited the sector. With the thinning out of the previously over-banked
sector and with larger banks have rationalised their operations, the banking
sector is now healthier and more resilient.
Sassoon says Sasfin responded to these challenges by improving efficiencies and
productivity and by refocusing on its core competency: entrepreneurial corporate
and commercial financing and relationship banking for high net worth
individuals. Sasfin has reduced its staff count to 467 from a peak of 533 over
the last two-and-a-half years and its margins and controls have been improved.
Sasfin is virtually alone among the smaller banks to survive the banking crisis
of last year, and the only bank now focusing on the entrepreneurial sector. The
Group has experienced market share gains in several key markets vacated by
competitors. Sasfin Bank"s risk-weighted capital adequacy ratio improved to
35,6% from 19,8% the previous year - well above the prescribed minimum of 10%.
Sassoon says interest rates appear to have entered a new downward phase, which
will boost margins on the Group"s medium term receivables, which are not linked
to downward interest rate movements. Lower interest rates will also provide a
welcome boost to the economy, resulting in greater demand for the Group"s
services, particularly financing, stockbroking and corporate finance.
The Group"s three lending divisions are budgeting for an improvement in
profitability due to falling interest rates, reduced overheads and improvements
in efficiencies. A modest improvement in Sasfin Investment and Asset Management
(SIAM) is expected, though a major turnaround in this division awaits a
sustained recovery in the stock market.
Group company Premier Freight Services enjoyed another strong year in 2003, and
is again budgeting for a steady increase in performance in the year ahead.
Several other factors also point to an improvement in performance:
* The recent launch of The Sasfin International Fund in association with LCF
Rothschild Asset Management of Paris, one of the world"s leading asset
management houses, introduces an exciting new offshore investment offering to
existing and potential Sasfin clients.
* The Group"s Financial Advisory division has been substantially strengthened by
a new team of experienced financial planners, replacing a team that had left six
months earlier and ensuring a renewed income stream from this division.
* Sasfin has acquired a 25,1% share in Fingro Management and Financial Services,
a newly formed financial services products distribution company.
* The Corporate Finance division was recently granted designated advisor status
by the JSE Securities Exchange SA for companies to be listed on the soon-to-be-
launched Alternative Exchange.
* The finalisation of Sasfin"s securitisation structure to bring it in line with
international best practice.
Ends
ISSUED FOR : SASFIN HOLDINGS LIMITED
CONTACT : Roland Sassoon 011 809 7778 Cell: 082 570 6051
FAX NO : 011 887 6167
E-MAIL : rsassoon@sasfin.com
WEBSITE : www.sasfin.com
ISSUED BY : TISH STEWART PR ASSOCIATES
CONTACT : Tish Stewart 011 325 4195 Cell: 082 443 6399
FAX NO : 011 325 4199
E-MAIL : tish@tspr.co.za
DATE : 10 September 2003
Date: 10/09/2003 10:21:43 AM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department
